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L.A. Tech is Booming: Should Silicon Valley Be Scared?

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L.A. Tech is Booming: Should Silicon Valley Be Scared?

AP

In this Thursday, Oct. 24, 2013, Snapchat CEO Evan Spiegel poses for photos, in Los Angeles. Spiegel dropped out of Stanford University in 2012, three classes shy of graduation, to move back to his father's house and work on Snapchat. Spiegel´┐Żs fast-growing mobile app lets users send photos, videos and messages that disappear a few seconds after they are received (AP Photo/Jae C. Hong)

Almost $5 billion has been invested in Los Angeles since 2008, with venture capital funding nearly tripling, according to reports.

Since 2009, tech deals and funding have risen 180 percent and 163 percent, according to CB Insights. Part of the reason for the rise are Snapchat, the ephemeral messaging startup which had three funding rounds amounting to $120 million, and JustFab, a retail platform focused on fashion, which has garnered $215 million and merged with ShoeDazzle. Other companies include video game network Machinima, backed by Google, as well as the site LegalZoom.

The most active venture capital investor is Upfront Ventures which has invested in everything from online groceries to gaming -- including Maker Studios which was bought by Disney for $950 million. 

So, does all this money and activity mean that Silicon Valley has something to be worried about? While $5 billion is a lot, it's still only a fraction of what changes hands in Silicon Valley. However, it is possible that startups may see Los Angeles as a viable alternative to opening up business in expensive and competitive Silicon Valley.

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